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New law prevents businesspeople from chairing both banks and companies

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The Law on Amending and Supplementing a number of Articles of the Law on Credit Institutions was ratified by the National Assembly on November 20 and will take effect on January 15, 2018.

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Banks have been divesting shares to clear cross-ownership

 

In finance and banking circles, Le Thi Bang Tam is a well known name. She was the Deputy Minister of Finance many years ago. After retirement, she was chair of HD Bank, a commercial bank, and chair of Vinamilk, a dairy producer.


Under the new law, Tam will have to make a decision about her post – remain as chair of HD Bank or chair of Vinamilk?

Most joint stock commercial banks in Vietnam now have chairs/CEOs holding high positions in other enterprises concurrently. These include SHB, Sacombank, HDBank, TP Bank, VIB Bank, Techcombank, SeABank, AB Bank, Kien Long Bank, Viet A Bank, Bac A Bank and NCB.

Do Minh Phu, chair of TP Bank, is now the chair of DOJI Group. Resigning from his post at TP Bank will be a difficult decision for Phu, who deserves credit for restructuring the bank. Phu is the founder and the ‘soul’ of DOJI Group.

According to Governor of the State Bank of Vietnam Le Minh Hung, the law aims to increase transparency, ensure the safety of the banking system, help reduce cross-ownership and stop manipulation activities in banking operations.

However, analysts say that influential owners of banks will be reluctant to give up their posts. 

Duong Cong Minh, chair of Sacombank, is still called ‘Minh Him Lam’ because he is chair of Him Lam Group. Do Minh Phu of TP Bank is still known as ‘Phu DOJI’ because of his important role in the gold, silver and gemstone conglomerate.

According to lawyer Bui Quang Tin, an expert in law and banking, Minh said that he will give up his post at Him Lam. 

However, Tin believes that Minh and others will not give up their enterprises while they manage banks.

“They will keep their business though they don’t have official titles,” Tin said, adding that Tran Xuan Gia was once chair of ACB (Asia Commercial Bank) , but insiders said it was Tran Mong Hung who held the power at the bank.

Banks have been divesting shares to clear cross-ownership status. Vietcombank sold 6.6 million shares, or 10.9 percent of charter capital of the Cement Finance Company (CFC). The bank also put 13.25 million shares of SaigonBank, or 4.3 percent of charter capital, into auction on November 20.

 

 

Source: VietNamNet

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